Saturday, October 25, 2014

Housing Problems in Regina

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1) Commercial Housing: According to Colliers International, the vacancy rate for downtown commercial units is now 10.5% instead of 1.5% three years ago[i]. However, as far as the writer knows, there is an increasing demand for commercial properties.

2) Affordable Housing: According to an article by Natascia Lypny, the rental rate increases while the vacancy rate increases[ii]. The contract signed in March 2013 between SHC and Deveraux was broken a year later as 48 units would be put into the market at $1200 per unit instead of the planned $326 though SHC had paid 2 million in advance for part of the 48-unit affordable housing project (returned later though refuted by NDP as a zero-interest loan)[iii].

3) General Residential Housing: In July 2014, the listing inventory went up 35% as compared to July 2013, reaching the highest level seen in many years. Yet the average sale price went up 5% to $331,489[iv].

Some people may say now is a buyer's market as the price is falling while much more houses have put up a "for sale" sign. However, others will say we can still anticipate a prosperous year with one of the highest economic growth rates and more immigrants coming. Then, who is right? Why do we see conflicting figures? Though there seems more house supply, the price is sustained because there is a positive anticipation with a structural gap at the two ends (commercial and affordable). This situation is deteriorated by malpractice of some developers in the housing industry, which can be corrected through a credit point system in contract selection or awarding and a deposit system to ensure the full fulfillment.

Structural problems (take commerical properties for example, there are huge differences in the location, square footage and furnishings) should be addressed, and government needs to play an active role in ensuring a good market order and that those good players are rewarded instead of bad ones.

[i] There Is a Lack of Commercial Tenants, Sa Sheng Bao, Oct. 11, 2014.
[ii] Natascia Lypny: Alternate Regina Housing Summit Set for 2nd Year, Leader Post, Oct. 4, 2014.
[iii] Affordable Housing Turned to Market Housing, and the Provincial Government Would Not Go to the Court, Sa Sheng Po, Sa Sheng Bao, Sept. 13, 2014.
[iv] Association of Regina Realtors: Sales Steady, Listings up, August 8, 2014.

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